Western Australia's Iron Bridge Project Under Way

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Researched by Industrial Info Resources Australia (Perth, Australia)--Construction at Fortescue Metals Groups Limited's (ASX:FMG) (Perth, Australia) grassroot Iron Bridge Project is due to begin shortly, as major contractors move in to excavate and perform bulk earthworks on the 5.2 billion-tonne iron ore site.

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Sources have confirmed that the grassroot project will involve the construction of an open pit mine with a basic crushing and screening processing circuit. The mine is expected to produce more than 1.5 million tonnes per year of hematite iron ore concentrate upon completion in mid-2015. When the site is operational, a Stage 2 expansion project will increase the mine's total processing capacity to 9.5 million tonnes of hematite-magnetite iron ore to be exported via existing rail lines from Port Hedland.

First production could begin at some stage in 2015, with best estimates suggesting that the site may indeed become operational by the first quarter of the New Year. It was recently announced that NRW Propriety Limited and the joint venture between ICRG Propriety Limited and Indigenous Construction Resources Group would be responsible for the $200 million bulk earthworks and excavation phase of the project.

A deal was signed in mid-2013 between Fortescue Metals Group and Taiwan's largest private company to develop the new iron ore project, based in Port Hedland, Western Australia. In August of the same year, an announcement was made that led to a deal that included an agreement by Formosa Plastics Groups (Taipei, Taiwan) to invest more than $1.5 billion into the FMG Iron Bridge Project, which is jointly owned by Fortescue (88%) and a subsidiary of China's Baosteel Group Corporation (SGX:CNY) (12%) (Shanghai, China).

Under the terms of the agreement, Formosa will acquire a 31% interest in the FMG Iron Bridge joint venture for $123 million and will provide more than $500 million to develop the first stage of the project, which encompasses the mine's large open pit and processing facilities.

The development of the FMG Iron Bridge Project represents a major strategic investment to complement Formosa's long-term manufacturing capabilities.

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